production function is the relationship between a set of factors of production and the maximum possible volume of product produced using this set of factors.
The production function is always concrete, i.e. intended for this technology. New technology - new productive function.
The production function determines the minimum amount of input needed to produce a given amount of product.
Production functions, no matter what kind of production they express, have the following general properties:
1) An increase in production due to an increase in costs for only one resource has a limit (you cannot hire many workers in one room - not everyone will have places).
2) Factors of production can be complementary (workers and tools) and interchangeable (production automation).
In the most general view The production function looks like this:
where is the volume of output;
K- capital (equipment);
M - raw materials, materials;
T - technology;
N - entrepreneurial abilities.
The simplest is the two-factor model of the Cobb-Douglas production function, which reveals the relationship between labor (L) and capital (K). These factors are interchangeable and complementary.
,
where A is a production coefficient showing the proportionality of all functions and changes when the basic technology changes (in 30-40 years);
K, L- capital and labor;
Elasticity coefficients of output for capital and labor inputs.
If = 0.25, then a 1% increase in capital costs increases output by 0.25%.
Based on the analysis of the coefficients of elasticity in the Cobb-Douglas production function, we can distinguish:
1) a proportionally increasing production function, when ( 
).
2) disproportionately - increasing);
3) decreasing.
Let us consider a short period of a firm's activity, in which labor is the variable of two factors. In such a situation, the firm can increase production by using more labor resources. The graph of the Cobb-Douglas production function with one variable is shown in Fig. 10.1 (curve TP n).
In the short run, the law of diminishing marginal productivity applies.
The law of diminishing marginal productivity operates in the short run when one production factor remains unchanged. The operation of the law assumes an unchanged state of technology and production technology, if the latest inventions and other technical improvements are applied in the production process, then an increase in output can be achieved using the same production factors. That is technical progress can change the scope of the law.
If capital is a fixed factor and labor is a variable factor, then the firm can increase production by employing more labor. But on the law of diminishing marginal productivity, a consistent increase in a variable resource, while the others remain unchanged, leads to diminishing returns of this factor, that is, to a decrease in the marginal product or marginal productivity of labor. If the hiring of workers continues, then in the end, they will interfere with each other (marginal productivity will become negative) and output will decrease.
The marginal productivity of labor (marginal product of labor - MP L) is the increase in output from each subsequent unit of labor
those. productivity gain to total product (TP L)
The marginal capital product MP K is defined similarly.
Based on the law of diminishing productivity, let's analyze the relationship between total (TP L), average (AP L) and marginal products (MP L) (Fig. 10.1).
There are three stages in the movement of the total product (TP) curve. At stage 1, it rises at an accelerating pace, since the marginal product (MP) increases (each new worker brings more production than the previous one) and reaches a maximum at point A, that is, the growth rate of the function is maximum. After point A (stage 2), due to the law of diminishing returns, the MP curve falls, that is, each hired worker gives a smaller increment in the total product compared to the previous one, so the growth rate of TP after TS slows down. But as long as MP is positive, TP will still increase and peak at MP=0.
Rice. 10.1. Dynamics and relationship of the total average and marginal products
At stage 3, when the number of workers becomes redundant in relation to fixed capital (machines), MR becomes negative, so TP begins to decline.
The configuration of the average product curve AR is also determined by the dynamics of the MP curve. At stage 1, both curves grow until the increment in output from newly hired workers is greater than the average productivity (AP L) of previously hired workers. But after point A (max MP), when the fourth worker adds less to the total product (TP) than the third, MP decreases, so the average output of four workers also decreases.
1. Manifested in a change in long-term average production costs (LATC).
2. The LATC curve is the envelope of the firm's minimum short-term average cost per unit of output (Figure 10.2).
3. The long-term period in the company's activity is characterized by a change in the number of all production factors used.
Rice. 10.2. Curve of long-run and average costs of the firm
The reaction of LATC to a change in the parameters (scale) of a firm can be different (Fig. 10.3).
Rice. 10.3. Dynamics of long-term average costs
Stage I:
positive effect of scale
An increase in output is accompanied by a decrease in LATC, which is explained by the effect of savings (for example, due to the deepening of the specialization of labor, the use of new technologies, the efficient use of waste).
Stage II:
constant returns to scale
When the volume changes, the costs remain unchanged, that is, an increase in the amount of resources used by 10% caused an increase in production volumes also by 10%.
Stage III:
negative scale effect
An increase in production (for example, by 7%) causes an increase in LATC (by 10%). The reason for the damage from the scale can be technical factors (unjustified gigantic size of the enterprise), organizational reasons (growth and inflexibility of the administrative and management apparatus).
law of diminishing marginal productivity.
The law of diminishing marginal productivity operates in the short run when one factor of production remains unchanged. The operation of the law assumes an unchanged state of technology and production technology. If the latest inventions and other technical improvements are applied in the production process, then an increase in output can be achieved using the same production factors, i.e. technological progress can change the boundaries of the law.
If capital is a fixed factor and labor is a variable factor, then the firm can increase production by employing more labor. But according to the law of diminishing marginal productivity, a consistent increase in a variable resource, while the others remain unchanged, leads to diminishing returns of this factor, i.e., to a decrease in the marginal product or marginal productivity of labor. If the hiring of workers continues, then in the end, they will interfere with each other (marginal productivity will become negative), and output will decrease.
The marginal productivity of labor (marginal product of labor - MPL) is the increase in output from each subsequent unit of labor:
i.e., the productivity gain to total product (TPL) is
The marginal product of capital MPK is defined similarly.
Based on the law of diminishing productivity, let's analyze the relationship between the total (TPL), average (APL) and marginal products (MPL), (Fig. 10.1).
There are three stages in the movement of the total product (TP) curve. At stage 1, it rises at an accelerating pace, since the marginal product (MP) increases (each new worker brings more production than the previous one) and reaches a maximum at point A, i.e., the growth rate of the function is maximum. After point A (stage 2), due to the law of diminishing returns, the MP curve falls, i.e., each hired worker gives a smaller increment in the total product compared to the previous one, so the growth rate of TP after TS slows down. But as long as MP is positive, TP will still increase and peak at MP=0.
Macroeconomics. Test 23
1. A special type of mixed economy is the social market economy model, which
demonstrates the need for an active role of the state not only in regulating economic processes, but also in solving complex problems social development societies
is just a theoretical construct.
states that the state has a secondary social role
2. The economy of other countries belongs to the social market
USA, Canada, Australia
Germany, Sweden, Norway
USA, Germany, France
Germany, Sweden, Australia
3. In Russia, the poverty threshold is
living wage
actual wages
minimal salary
4. In a mixed economy, the state, when pursuing its commercial policy, must
maintain competition with private business
limit profits to private capital
only take on what you can't do private business
manage private businesses from a single center
5. The redistribution of income in a market economy is carried out
depending on household preferences
arbitrarily
through the regulatory function of the state
in accordance with the share of participation of production factors
6. If the value of the Gini coefficient has increased in a country, then this means that in this country
increased inequality in the distribution of individual incomes
inequality in the distribution of individual incomes has decreased
increased tax revenue
decreased tax revenue
7. What social groups people are most in need of state support in conditions of rapid inflation
persons whose nominal income growth lags behind price growth
participants in the "shadow" economy
persons with fixed nominal incomes
consumer goods entrepreneurs
8. Nominal income is
the amount of money available to the buyer without relativity to the current prices of goods and services
the amount of money available to the buyer, taking into account current prices and the number of goods that can be purchased with them
both options are wrong
9. The law of diminishing productivity of factors of production operates in the economy. How is economic growth supported under these conditions?
will require more and more resources
an increase in resources is needed, but the price of an additional unit of resources will increase
the increase in additional resources will not increase, but will reduce the total volume of production
less and less production resources will be required
10. In the long run, the level of output is determined by:
the money supply, the level of government spending and taxes;
the amount of capital and labor, as well as the technology used;
population preferences;
the value of aggregate demand and its dynamics;
11. Intensive factors include:
expansion of production capacities;
growth in labor productivity;
decrease in capital productivity;
12. In an economy described by a Cobb-Douglas production function with constant returns to scale, the share of labor income in output
decreases as the capital/labor ratio rises
increases as the capital/labor ratio rises
does not depend on the capital/labor ratio
sometimes increases and sometimes decreases as the capital/labor ratio rises.
13. In the Solow production function, the stable output per worker is explained by
population growth
an increase in the savings rate
technological progress
14. In Anchishkin's production function, output growth is explained in addition to the main factors of production
product research and development (R&D) costs
the growth of the qualifications of the employed
neutral technological progress
15. Increasing the retirement rate in the economy with a constant production function, saving rate, constant population growth and technological progress
will increase the stock of capital per employed person at steady state
will reduce the sustainable level of the capital stock per person
will not change the sustainable level of capital-labor ratio
nothing definite can be said
Blog to help
Macroeconomics. Tests with answers. The economic growth.
1. The law of diminishing productivity of factors of production operates in the economy. How is economic growth supported under these conditions:
a) will require more and more resources;
b) an increase in resources is needed, but the price of an additional unit of resources will increase;
c) the increase in additional resources will not increase, but will reduce the total volume of production;
d) less and less production resources will be required.
2. An increase in the volume of production resources expands the possibilities of society:
a) to improve production technology;
b) to raise the standard of living;
c) to increase the production of goods and services.
3. In the long run, the level of output is determined by:
a) the money supply, the level of government spending and taxes;
b) the amount of capital and labor, as well as the technology used;
c) preferences of the population;
d) the value of aggregate demand and its dynamics;
4. What is meant by the category "extensive factors":
a) an increase in labor productivity;
b) reduction of labor resources;
c) the growth of investment while maintaining the existing level of production technology.
5. Intensive factors include:
a) expansion of production capacity;
b) growth of labor productivity;
c) decrease in capital productivity;
6. Distinctive features genetic approach are:
a) a clear setting of development goals for the projected object;
b) taking into account the results of applying the achievements of scientific and technical progress in production;
c) reliance on data on the prehistory of the predicted object;
7. In an economy described by a Cobb-Douglas production function with constant returns to scale, the share of labor income in output is:
a) decreases as the capital/labor ratio increases;
b) increases as the capital/labor ratio grows;
c) does not depend on the capital/labor ratio;
d) sometimes increases and sometimes decreases as the capital/labor ratio rises.
8. In the Cobb-Douglas production function, the elasticity coefficient of gross output for capital reflects:
a) relative volume change industrial production with a capital growth of 1%;
b) an absolute increase in the volume of output with an increase in capital by 1%;
c) relative annual change in the volume of output with the growth of capital by 1%;
9. In the Solow production function, sustainable output per worker is explained by:
a) the growth of the country's population;
b) an increase in the savings rate;
c) technological progress.
10. In Tinbergen's production function, output growth is explained in addition to the main factors of production:
a) neutral technological progress;
b) an increase in the savings rate;
c) materialized technological progress.
11. In Anchishkin's production function, output growth is explained in addition to the main factors of production:
a) product research and development (R&D) costs;
b) the growth of the qualifications of the employed;
c) neutral technological progress.
12. Increasing the retirement rate in the economy with a constant production function, savings rate, constant population growth and technological progress:
a) increase the stock of capital per employed person at steady state;
b) reduce the sustainable level of the capital stock per person;
c) will not change the stable level of capital-labor ratio;
d) nothing definite can be said.
13. Suppose that in country A the marginal productivity of capital is 1/5, and in country B it is 1/3, the marginal propensity to save is the same in both countries. According to the Damara model, after an increase in real output in country A:
a) 13% lower than in country B;
b) is 60% of the growth rate in country B;
c) 1.67 times higher than in country B;
d) 40% higher than in country B.
14. The most significant causes of economic growth in developed countries are:
a) an increase in the amount of working time;
b) technological changes in production;
c) an increase in the amount of capital used;
d) implementation of monetary and fiscal policies that promote economic growth;
e) the growth of the qualifications of the labor force.
15. Which of the following countries has achieved the highest rates of economic growth in the last 4 decades?
The law of diminishing productivity applies
Hello again! There was a problem with these tests in economics (I'm just at a loss, because I can not find answers to them anywhere). Those for whom it will not be difficult to take a professional look at them and indicate the answers in the comments, I will be very grateful. Valid until tomorrow morning. Thanks in advance.
1. If a change in the quantity of a product that consumers are willing and able to buy is caused by a non-price factor, changes occur:
a) in the demand for the product, which will shift the demand curve;
b) in demand for the product, but the demand curve will not shift;
c) in the supply of goods, the curve will not shift;
d) in the supply of goods, the curve will shift.
I don't know this at all
2. Market demand is not affected by:
a) the number of buyers in the market;
b) consumer income;
c) resource prices;
d) prices for substitute goods. I'm leaning towards this option.
3. A product is considered normal if the demand for it:
a) increases with a decrease in the price of a substitute product; I would answer like this
b) decreases with increasing consumer income;
c) increases with increasing consumer income;
d) decreases with an increase in the price of the complementary good.
4. The law of supply characterizes the connection:
a) directly between subsidies to suppliers and the volume of their supply;
b) the inverse between the prices of resources and the supply of products that are made from them;
c) the inverse between taxes and supply;
d) direct relationship between the number of suppliers and their supply; I would choose this option
e) the direct relationship between the price of goods and their supply.
5. If the demand in the market exceeds the supply, this is an example of an action:
a) the law of diminishing returns;
b) an excess of goods;
c) a shortage of goods; I think this option is correct.
d) the operation of the law of increasing opportunity costs.
6. The law of diminishing marginal productivity of production operates in the economy. How to support economic growth under these conditions:
a) less and less production resources will be needed;
b) the increase in additional resources will not increase, but will reduce the total volume of production;
c) an increase in resources is needed, but the price of an additional unit of resources will increase; maybe choose this option?
d) more and more resources will be needed.
7. If the law of diminishing marginal productivity of factors of production operates in the economy, to support its growth it is necessary:
a) proportional growth of all factors of production;
b) the growth of some factors of production with a constant volume of at least one production resource;
c) an increase in the volume of only one factor of production (with the volumes of other factors unchanged);
d) proportional growth of all factors of production (in kind) with a decrease in the price of an additional unit of production.
I don't have any options here.
8. The problem of "what to produce":
a) takes place only with a private producer, and not in society;
b) is studied on the basis of the operation of the law of marginal productivity of factors of production;
c) occurs only in conditions of acute shortage of resources.
I think the first or second option is correct
9. There is no “how to produce” problem:
a) if the amount of production resources is clearly fixed and tied to specific goods; I'm leaning towards this answer.
b) if the economy does not feel the operation of the law of marginal productivity of factors of production;
c) under the condition of limited stocks of production resources in relation to the available labor force;
d) in a technically advanced society, where this problem becomes purely technical.
10. Production Capability Line Shows:
a) the exact quantity of the two goods that the farm is going to sell;
b) the best possible combination of two goods;
c) an alternative combination of goods in the presence of a given amount of resources;
d) the time when the law of marginal productivity of factors of production comes into play.
purely intuitively would choose the answer "b"
11. An economy is effective if it achieves:
a) full time employment; I'm leaning towards this answer.
b) full use of production resources;
c) either full employment or full use of other resources;
d) both full employment and full utilization of other production resources.
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The law of diminishing marginal productivity operates in the short run when one factor of production remains unchanged. The operation of the law assumes an unchanged state of technology and production technology. If the latest inventions and other technical improvements are applied in the production process, then the increase in output can be achieved using the same production factors, i.e., technological progress can change the boundaries of the law.
If capital is a fixed factor and labor is a variable factor, then the firm can increase production by employing more labor. But according to the law of diminishing marginal productivity, a consistent increase in a variable resource while the others remain unchanged leads to a diminishing return of this factor, i.e. to a decrease in the marginal product or marginal productivity of labor. If the hiring of workers continues, then in the end, they will interfere with each other (marginal productivity will become negative), and output will decrease.
The marginal productivity of labor (marginal product of labor - MP L) is the increase in output from each subsequent unit of labor:
those. productivity gain to total product (TP L) is equal to
The marginal capital product MP K is defined similarly.
Scale effect of production. In the long run, the firm has the opportunity not only to combine factors of production, but also to change the number of factors used, i.e. change the scale of production. At the same time, changing the factors in the same proportion can lead to different results.
Economies of scale are the ratio between the relative change in output and the relative change in factor inputs. An isoquant map can express different returns to scale. If the distances between isoquants decrease, this indicates that there is a positive scale effect, i.e. an increase in output is achieved with a relative reduction in the use of resources.
If the distances between isoquants increase, this indicates a negative scale effect.
In the case when an increase in production requires a proportional increase in resources, they speak of zero economies of scale - the distances between isoquants do not change.
There are no laws governing the direction of the effect of scale, and the nature of the effect of scale can only be determined through empirical observations. In this regard, the following factors can be identified as contributing to the growth of returns to scale: productivity growth due to a deeper division of labor; great opportunities for the application of new technologies and techniques; fuller capacity utilization; the use of highly skilled labor; specialization in management. As factors that reduce economies of scale, it is necessary to single out such factors as the growing difficulties of management and coordination; growth in transport and distribution costs; growth in administrative costs; high probability of bottlenecks and accidents.
Since the nature and duration of the economies of scale are determined by the characteristics of the technology, each industry will have its own optimal scale of production.
In the case of increasing economies of scale, the firm needs to increase the volume of production, as this leads to a relative economy of available resources. Decreasing economies of scale indicate that the minimum efficient size of the enterprise has already been reached and further increase in production is not advisable. Thus, the analysis of output using isoquants makes it possible to determine the technical efficiency of production.
1. The essence of the law. With an increase in the use of factors, the total volume of production increases. However, if a number of factors are fully involved and only one variable factor increases against their background, then sooner or later there comes a moment when, despite the increase in the variable factor, the total volume of production not only does not grow, but even decreases.
The law says: an increase in the variable factor with fixed values of the rest and the invariance of technology ultimately leads to a decrease in its productivity.
2. Operation of the law. The law of diminishing marginal productivity, like other laws, operates in the form of a general trend and manifests itself only when the technology used is unchanged and in a short period of time.
In order to illustrate the operation of the law of diminishing marginal productivity, one should introduce the concepts:
- common product- the production of a product using a number of factors, one of which is variable, and the rest are constant;
- average product- the result of dividing the total product by the value of the variable factor;
- marginal product- increment of the total product due to the increment of the variable factor.
If the variable factor is incremented continuously by infinitesimal values, then its productivity will be expressed in the dynamics of the marginal product, and we will be able to track it on the graph (Fig. 15.1).
Rice. 15.1.Operation of the law of diminishing marginal productivity
Let's build a graph where the main line OAHSV– dynamics of the total product:
1. Divide the curve of the total product into several sections - cuts: OB, BC, CD.
2. On the segment OB, we arbitrarily take point A, at which the total product (OM) equal to variable factor (OR).
3. Connect the dots O and BUT- we will get the RAR, the angle of which from the point of coordinates of the graph will be denoted?. Attitude AR to OR– the average product, also known as tg ?.
4. Draw a tangent to point A. It will intersect the axis of the variable factor at point N. A APN will be formed, where NP- marginal product, also known as tg ?.
On the whole segment OV tg? the law of diminishing marginal productivity does not show its effect.
On the segment Sun the growth of the marginal product is reduced against the background of the continuing growth of the average product. At the point FROM marginal and average product are equal to each other and both are equal?. Thus began to appear law of diminishing marginal productivity.
On the segment CD the average and marginal products are declining, and the marginal product is faster than the average. At the same time, the total product continues to grow. Here the operation of the law is fully manifested.
Behind the dot D, despite the growth of the variable factor, an absolute reduction even of the total product begins. It is difficult to find an entrepreneur who would not feel the effect of the law beyond this point.
24. Factors of production of the firm. The production function of the firm. The law of diminishing productivity of factors of production.
Production is the basis of the business activity of the company. After all, income is a realized product or service. Commercial activity is preceded by industrial activity.
Production is the process of creating goods necessary for consumers: tangible and intangible. wealth(services). In this case, firms use factors of production, which are also called input (input) production factors.
The factors of production used by the firm are divided into constants and variables. Fixed factors of production are those whose quantity remains unchanged during the production of a given product (for example, machine equipment in the production of a given batch of shoes). Variable factors of production - those factors, the amount of which changes during the production of a given product (for example, electricity, raw materials).
For example, the owner of a confectionery uses such inputs as the labor of confectioners and sales assistants, raw materials in the form of flour, sugar, yeast, as well as capital represented by mixers, ovens, baking dishes, etc.
The factors of production are usually divided into three main categories: labor, capital, materials.
Labor as a production factor includes skilled and unskilled labor, as well as entrepreneurial activity.
The relationship between the input factors and the final product output is described production function. It is the starting point in the microeconomic calculations of the company, allows you to find the best option for using production capabilities.
Law of diminishing marginal productivity
Suppose that F 1 is a variable factor, while the other factors are constant:
Total product (Q) is the amount of an economic good produced using some amount of a variable factor. Dividing the total product by the amount of the variable factor consumed, we obtain average product (AP).
Marginal Product (MP) is defined as the increase in the total product resulting from infinitesimal increments in the amount of the variable factor used:
Factor substitution rule: the ratio of the increments of the two factors is inversely related to the magnitude of their marginal products.
Law of diminishing marginal productivity States that With an increase in the use of any factor of production (with the rest remaining unchanged), sooner or later a point is reached at which the additional use of a variable factor leads to a decrease in the relative and further absolute volumes of output.
The resource use rule can be expressed as MRP = MRC, where MRP is the marginal product in monetary terms and MRC is the marginal cost.
25. Production grid and isoquant. Isocost.
Q = f(K, L), where To- capital, L- labor.
Production grid (Q=F(L,K))
|
Capital cost (K) |
Labor cost (L) |
|||||
The production grid shows that the same amount of output can be produced with different combinations of factors of production. For example, Q=85 units can be produced with a combination of factors 200K and 30L and with a combination of 100K and 60L.
If we connect all combinations of resources, the use of which provides the same amount of output, we get isoquants.
Isoquanta is a curve that reflects the various combinations of resources that can be used to produce the same amount of output.
Isoquants for the production process mean the same as indifference curves for the consumption process. They have similar properties: 1. have a negative slope, 2. are convex relative to the origin, 3. do not intersect with each other, 4. isoquant, lying above and to the right of the other, represents a larger volume of output, 5. show real levels of production: 10 thousand, 20 thousand, 30 thousand, etc. 
The concave shape of the isoquant shows that the marginal rate of technological substitution decreases as one moves down the isoquant. This means that labor and capital are not absolutely interchangeable, and therefore there are certain difficulties in replacing capital with labor, i.e. there are certain limits of interchangeability of factors.
The amount of money that the company has to organize production is called the budget constraint (graphically - a straight line, isocost).
Isocost - a straight line showing all combinations of resources, the use of which requires the same cost.
, where - R To and R L - respectively, the price of a unit of capital and a unit of labor
Using the same method as in determining the equilibrium of the consumer, we combine the isocost map with the isocost and the touch point will show the largest volume of production for given budget possibilities (Figure 6.3 .b.).
Producer equilibrium- the state of the producer in the process of replacing one factor of production with another, when the last ruble spent on each resource brings the same marginal product. 
Mathematically, the system of equilibria is described by a system of equations. 
- a condition for optimizing production - choosing from all possible options for using resources those that give the best option. In order to see the prospects for the development of an enterprise in the long term, it is necessary to imagine how the volume of production and the cost of acquiring factors will increase at each stage of the growth in production volume. Let's connect isoquants with isocosts by points of contact, we will get the trajectory of the economic activity of the company or the production activity of the enterprise isoclinal line OK (Fig. 6.3. in)
| " |
The Essence of the Law
With an increase in the use of factors, the total volume of production increases. However, if a number of factors are fully involved and only one variable factor increases against their background, then sooner or later there comes a moment when, despite the increase in the variable factor, the total volume of production not only does not grow, but even decreases.
The law says: an increase in a variable factor with fixed values of the others and the invariance of technology ultimately leads to a decrease in its productivity.
Operation of the law
The law of diminishing marginal productivity operates in the short run when one factor of production remains unchanged. The operation of the law assumes an unchanged state of technology and production technology. If the latest inventions and other technical improvements are applied in the production process, then an increase in output can be achieved using the same production factors, i.e. technological progress can change the boundaries of the law.
If capital is a fixed factor and labor is a variable factor, then the firm can increase production by employing more labor. But according to the law of diminishing marginal productivity, a consistent increase in a variable resource, while the others remain unchanged, leads to diminishing returns of this factor, i.e., to a decrease in the marginal product or marginal productivity of labor. If the hiring of workers continues, then in the end, they will interfere with each other (marginal productivity will become negative), and output will decrease.
36 . Scale effect of production
After the firm determines for itself the most effective method production, the expansion of output is possible only by changing production scale, i.e. a proportional increase in the use of all productive resources.
Let the initial dependence between output and resources be described by a production function of the form
Q0=f(K,L).
An increase by a certain number of times (for example, in z times) of all applied resources will lead to a change in the volume of output from Q0 before Q1, so
Q1=f(zK,zL).
If the new output increases by more than z once ( Q1 > zQ0), then we have positive economies of scale.
If the new output increases by less than z once ( Q1< zQ0 ), then we have negative economies of scale.
Finally, if the new output also increases by z once ( Q1= zQ0), then we have constant economies of scale.
For most production processes, the nature of the economies of scale varies depending on the output volumes achieved. Initially, the effect may be permanent or even positive, but after expanding the size of the enterprise beyond a certain limit, the effect becomes negative.
Graphically, the economies of scale of production can be illustrated through long-run average cost curves,
37 . Types of factor markets, features of their functioning
factors of production. Types and forms of factor markets.
When considering the topic, we will focus on the features of the market turnover of factors of production. In general, the same laws of supply and demand and the same mechanism of the competitive market operate here, but they have some peculiarities.
Economic science distinguishes four groups of factors of production (resources):
1) labor - human resources (people with their abilities to produce goods and services);
2) capital - physical (means of production) or money;
3) land - natural resources (plots of territories, subsoil, water and forest resources, etc.);
4) entrepreneurship (the ability of people to organize the production of goods and services, i.e. entrepreneurship).
Factor markets are markets in which, as a result of the interaction of supply and demand, prices for labor, capital and natural resources are formed in the form wages, interest income and rent.
The demand for factors of production is secondary and is determined by the demand for products produced with the help of these factors. The higher the demand for a product, the higher the demand for the resources from which it is made, and vice versa. The derivative nature of the demand for factors of production is explained by the fact that the need for them arises only if they can be used to produce final consumer goods that are in demand.
For the organization of the production process, many factors of production are required. Consequently, the demand for factors of production is an interdependent process, where the volume of each resource involved in production depends on the prices not only for each of them, but also for the other resources associated with it.
Factors of sustainable demand for resources are:
1) the efficiency (productivity) of a production resource when creating a product. For example, the more productive equipment is used at the enterprise, the fewer machines are needed to produce the planned amount of products;
2) the market value (or price) of a good produced with the help of a production resource. If the cost of a commodity rises, it becomes profitable to increase the volume of its production, so the demand for resources will also increase.
There are two main types of markets for inputs:
a) the market of production resources under conditions of perfect competition, when neither the seller nor the buyer can influence the prices of resources. A large number of sellers and buyers simultaneously operate in this market;
b) the market of production resources in conditions of imperfect competition - either the buyer or the seller can influence the prices of production resources.
A monopoly firm in the market finished products can control the price of the resource. Since it tends to produce less than its competitors, it always requires fewer resources. By buying up the bulk of the resources, it affects their price.
Industry demand for inputs is the sum of the demand for inputs from individual firms in an industry at each possible price for inputs. And the market demand for resources is the sum of all industry demands.
Factors of production (labor, capital, land) can be more or less complementary and mutually substitutable: living labor can be partially replaced by technology, natural raw materials can be replaced by artificial materials. However, labor, raw materials, and technology are connected and complementary only in a single production process. Individually, each of them is useless. But with other equal conditions a change in prices for one of the factors of production will cause a change in the quantity attracted not only of this, but also of other factors of production associated with it. For example, higher wages and relatively low prices on machine tools can cause a decrease in the demand for labor and increase it for equipment that replaces labor.
What should be the ratio of different resources that will provide the firm with the lowest cost of producing a certain amount of output?
To answer this question, it is necessary to consider the concept of “marginal product of a factor of production”. Marginal product (MP) is the increase in total product obtained from the application of an additional unit of a variable factor of production.
The labor market is a special area of market relations where transactions for the purchase and sale of labor force are made. It did not always exist and historically appeared on a mass scale only under the conditions of classical capitalism. Then, on the one hand, the main means of production were concentrated in the private property of businessmen, and on the other hand, the vast majority of workers were alienated from them. All employees became legally free persons, and the main, and even the only, source of their existence was the sale of their labor.
Work- this is the expedient activity of man, with the help of which he transforms nature and adapts it to meet his needs.
Earth- these are resources that are given by nature itself (natural resources) and can be used to produce goods and services.
Land as a factor of production has the following features:
1) unlike other factors of production, land is non-reproducible at will, i.e. its quantity is limited;
2) in its origin it is a natural factor, and not a product of human labor;
3) land is not amenable to movement, free transfer from one industry to another, from one enterprise to another, i.e. she is motionless;
4) the land used in agriculture, with rational exploitation, not only does not wear out, but also increases its productivity.
The conclusion follows from this: the one who owns the land or uses it, receives certain advantages. In this regard, it is important to distinguish between two concepts: “land ownership” and “land use”.
Land ownership means the right of a given (natural or legal) person to a certain piece of land on historical grounds. Most often, land ownership refers to the ownership of land. It is carried out by the owners of the land.
Land use is the use of land in the prescribed manner. The user is not necessarily the owner. Most often in real life the subjects of land tenure and land use are personified by different persons. In this regard, special economic relations arise between them, generating a special income and its special economic form - land rent.
Entrepreneurship - essential attribute of the market economy. Although the history of entrepreneurship goes back centuries, its modern understanding was formed during the formation and development of capitalism, in which free enterprise serves as the basis and source of prosperity. But only at the turn of the nineteenth and twentieth centuries. economists have recognized the crucial importance of this factor of production for economic progress.
In modern literature, it is customary to distinguish three functions of an entrepreneur.
First function- resource. Any economic activity requires objective factors (means of production) and subjective, personal factors (workers with sufficient knowledge and skills).
Second function- organizational. Its essence is to ensure such a combination and combination of factors of production that best contributes to the achievement of the goal.
Third function- creative, associated with organizational and economic innovation. The importance of this function for business has increased dramatically in the context of modern scientific and technological progress and the development of non-price competition.
38 . The land market and its features
We have already mentioned the need to distinguish capital as such from the services of capital. This is true for land as well. Like physical capital, land can be rented out. At the same time, the tenant acquires the services of the land for a certain period, paying the rent to the owner of the land. The latter also acts as the price of land services.
The amount of rent is determined by the demand for land services from tenants ( D T) and their offers from landlords ( S T). The demand for land services, by analogy with the demand for labor and capital services, depends on marginal income from the earth ( MRP T) and rent ( R T). Since the marginal profitability of land is decreasing, the function of demand for land services from rent has a negative slope: as rent decreases, the amount of rented land ( T) is growing.
The specificity of the offer of land services is that the amount of land offered for lease ( T) is generally fixed, i.e. does not depend on rent. Therefore, the supply function in the land market is a vertical line (Fig. 15.7).
39 . Rent, types and features of formation. Land price.
The land factor, like the capital factor (as opposed to the labor factor), is separable from the personality of its owner. For example, land is often owned by one person and used by another. The owner of the land, for a certain fee, transfers the right to exploit the land to the tenant, who produces agricultural products and pays the landowner from the proceeds from its sale. This payment for the factor of production "land" is called land rent.
Types of land rent
Land rent is represented by two main types:
differential rent;
absolute rent.
Land plots are located in different natural and climatic zones: some in favorable, others in unfavorable, much worse conditions. The lands also differ in location: some are located near large cities and transport arteries, others lie in remote areas.
At the same time, it should be borne in mind that the land fund of the country is limited; there is a limited amount of both all land in general and land plots of a certain quality.
Farms operating on the best land or geographically closest to the market are in an advantageous position compared to farms on the worst or remote sites, since their costs are much lower. This makes it possible to extract additional income, called differential rent (the natural fertility of the land).
In addition to the natural fertility of the land, there is economic fertility. It is associated with successive additional investments in it of capital and reflects the intensive path of development of agricultural production. Farms that make efficient use of capital investments and conduct intensive production receive differential rent.
Absolute rent is a consequence of the absolutely inelastic supply of land in the conditions of the existence of private property on it. On the one hand, private ownership of land excludes the free migration of capital to agriculture. On the other hand, the amount of land suitable for agricultural use is limited. Under these conditions, landowners charge rent for any land, and tenants charge inflated prices for agricultural products in order to be able to pay this rent.
Ownership of land is associated with certain benefits and costs, the comparison of which will determine the expediency of maintaining property or its alienation. Owning land, the owner does not use other possible options for generating income, for example, he could not buy land, but put money in a bank at interest.
In this regard, the income of the landowner can be calculated as the ratio of the rent received to the market rate of loan interest.
Land price \u003d Annual rent / Interest rate
The price of land shows how much money is required to be deposited in the bank in order to receive an income equal to the given land rent at the prevailing market rate of interest.
The amount of land rent is formed as a result of the interaction of supply and demand in the land market.
The specifics of the land market is that, within the framework of the national economy, the supply of land and natural resources absolutely inelastic, since the amount of resources is a fixed value.
Demand for land shows how much land is willing to rent at various possible levels of payment for it. At high rents, the amount of land leased out will be less than at low rents.
The demand curve for land is identical to the marginal revenue curve for land. The marginal income of land depends, in turn, on the productivity of the natural resource. At high rents, only very productive lands can be leased, since only a high marginal income can allow high rents to be paid, and possibly a profit for the tenant. With a fall in land rent, even less productive land will be leased.
40 . Capital market and interest
Term "capital" is used in two main meanings: as a measure of the entire property (property) of the enterprise and as the name of a factor of production.
Capital as a factor of production expresses the totality of production resources created by people in order to use them to produce future economic benefits for the sake of profit. The composition of capital includes: buildings, structures, equipment, tools, technologies, developments, materials, raw materials, semi-finished products.
Different elements of capital participate in the production process in different ways. One component of capital is used once and completely consumed during each cycle of production. The other part functions for several years and is gradually consumed over a number of production cycles. The first part of the capital is called negotiable capital, and the second - main.
To working capital include raw materials, materials, fuel, energy, semi-finished products, etc.
The working capital market is a typical resource market. The principles of its organization and the mechanism for establishing equilibrium on it have much in common with the labor market. Profit maximization in the working capital market is achieved at the point of equality of the marginal product in monetary form and the marginal cost of the corresponding material resource. In other words, when an enterprise optimizes the demand for working capital, the MRP = MRC rule applies.
An important feature of working capital is that its elements are transformed into cash. Therefore, working capital is called working capital.
The creation of any value involves the use fixed capital. The organization of a new production is impossible without capital investments in facilities, buildings, and equipment. The functioning of the enterprise also requires the cost of updating and restoring the existing fixed capital.
Since fixed capital has been involved in economic activity for several years, the time factor is of particular importance in the functioning of the fixed capital market.
Interest income (percentage) is the return on the capital invested in the business. This income is based on the costs of alternative use of capital (money always has alternative uses, for example, it can be put in a bank, spent on shares, etc.). The amount of interest income is determined by the interest rate, i.e. the price a bank or other borrower must pay to a lender for the use of money over a period of time.
The subjects of demand for capital are businesses, and the subjects of supply are households (they offer sums of money, i.e. their savings).
The demand for capital is the demand for borrowed funds. It can be represented graphically as a curve (Dc), which has a negative slope (Fig. 7.2). The supply of capital is graphically represented by a curve (sc) with a positive slope. At the point of intersection of these two curves (E) equilibrium is established in the capital market. It corresponds to the equilibrium interest rate (r 0).
The supply of borrowed funds within the market as a whole is directly dependent on the volume of bank deposits, i.e. citizens' savings. The volume of savings is directly determined by the level of interest paid on deposits. The higher it is, ceteris paribus, the greater the amount of savings and the greater will be the amount of proposed borrowings.
Nominal rate is the current market interest rate, excluding inflation. The real rate is the nominal rate adjusted for the expected rate of inflation.
Thus, interest in a market economy acts as the price of equilibrium in the capital market - a factor of production. For the subject of capital supply, interest acts as income, for the subject of demand - as the costs incurred by the borrower.
41 . Labor market, equilibrium in the labor market
The labor market is the sphere of formation of supply and demand for labor. Through it, the sale of labor is carried out for a certain period.
The peculiarity of the labor market and its mechanism: the object of sale on it is the right to use the labor force, knowledge, qualifications and abilities for the labor process.
In a broad sense, the labor market is a system of socio-economic and legal relations in society, norms and institutions designed to ensure a normal continuous process of reproduction of the labor force and the efficient use of labor.
Relations in the labor market are regulated by public and state institutions.
The labor market is an important part of any economic system, since its condition largely determines the rate of economic growth of this system. At the same time, the labor market is a key element of the socio-economic policy pursued by the authorities. Thus, the labor market is simultaneously influenced by the social and economic policies of the region or the state as a whole.
These relations are contradictory due to the laws of supply and demand. In the process of exchange, a state of their temporary equilibrium is established, which is expressed by a certain level of employment and wages.
Demand for labor under conditions of free competition is formed under the influence of two main indicators: real wages and the value of the marginal product of labor (the product of labor produced by the last hired worker). The supply of labor directly depends on the level of wages: the higher the salary, the higher the level of labor supply.
Equilibrium in the labor market is such a situation in the labor market when a certain level of the wage rate corresponds to the supply of labor given by this level.
42. Wage
Wage- this is the income in cash received by an employee for the provision of a certain labor service. Wages are the main source of income for the working population. From the point of view of the worker (household), its purpose is to ensure the economic conditions of human existence.
Wages are a price of a special kind, the value of which is closely related to the standard of living of the population.
Wage employees in real conditions, it exists in two forms of its organization: time and piecework. In the first case, the salary is formed in proportion to the hours worked. This can be an hourly rate, a weekly rate, but most often in our conditions a monthly rate is set, which is commonly called a monthly salary. When establishing a monthly salary, the duration of the working week and working day is stipulated.
At piecework the form of remuneration, the employee's earnings are made dependent on the quantitative indicators of the work performed through the establishment of a payment standard for each unit of output.
Types of wages
Minimal salary- this is the limit of wages, which, under a given state of the economy and the level of labor productivity, society can pay to any worker and which allows maintaining the living wage of people. The minimum wage now replaces the tariff system and serves as the starting point for determining the level of wages by profession and the qualifications of workers.
The amount of wages serves as an important indicator of the standard of living of the population, but it is still impossible to judge the economic and social well-being of the people only by the quantitative value. Therefore, in order to characterize the standard of living, to compare according to this indicator different states, as well as different categories of the population within the country, such characteristics of wages as nominal and real wages are used.
Nominal wages- the amount of money that is accrued and paid to the employee for his work. It is subdivided into time and piecework forms of payment. Based on the nominal monthly salary, the average monthly salary for the calendar year is calculated, excluding the vacation period. This calculation is made to determine the amount of vacation pay, payment of sick leave, determine the dynamics of the standard of living and tariff rates.
Real wage- is the totality of material goods and services that a worker can buy with his nominal wages. Its value depends on the size of nominal wages and the level of prices for goods and services. The dynamics of real wages is directly dependent on nominal wages and inversely on the price level.
43 . Manifestation of market imperfections
1. The market is not able to resist monopolistic tendencies. In the conditions of the market element, monopolistic structures inevitably arise that limit the freedom of competition. When the market environment is uncontrolled, monopolies are formed and strengthened. Unjustified privileges are being created for a limited circle of market participants.
2. The market is not interested in and unable to produce public goods (“public goods”). These goods are either not produced by the market at all, or supplied to them in insufficient quantities.
3. The market mechanism is unsuitable for eliminating external (side) effects. Economic activity in the conditions of the market affects the interests of not only its direct participants, but also other people. Its consequences are often negative.
4. The market does not have the ability to provide social guarantees, to neutralize excessive differentiation in the distribution of income. The market, by its very nature, ignores social and ethical criteria, i.e. equity in the distribution of resources and income. It does not provide stable employment for the able-bodied population. Everyone must independently take care of their place in society, which inevitably leads to social stratification and increases social tension.
A "normal" market generates abnormal proportions of the distribution of wealth created. Market relations create favorable conditions for the manifestation of selfish interests that give rise to speculation, corruption, racketeering, drug trafficking, and other antisocial phenomena.
5. The market mechanism generates incomplete and insufficiently perfect information. Only in a fully competitive economy do market participants have sufficiently comprehensive information about prices and prospects for the development of production. But competition itself forces firms to hide the real data on the state of affairs. Information costs money, and economic agents - producers and consumers - possess it to varying degrees.
The lack of perfect information, the incompleteness and uneven distribution of it create advantages for some and undermine the ability to make optimal decisions for others. Sellers and buyers, entrepreneurs and workers do not have equal information. Meanwhile, information is in some respects a public good. The most complete and reliable information is provided not by the private market, but by state institutions. So, the market is not an ideal mechanism for regulating economic activity.
Having considered the advantages and disadvantages of the market, we see that it is effective in those areas that are subject to the action of the free price mechanism, therefore, state regulation complements the market.
Methods, tools and main goals of state regulation
Legal regulation consists in the establishment by the state of the rules of the "economic game" for firms of producers and consumers. The system of legislative norms and rules determines the forms and rights of ownership, the conditions for concluding contracts and the functioning of firms, mutual obligations in the field of labor relations between trade unions and employers, etc.
Administrative regulation includes measures for regulation, quotas, licensing, quotas, etc. With the help of a system of administrative measures (in the form of measures of consolidation, permission, coercion), state control is exercised over prices, incomes, the discount rate, and the exchange rate. Currently, the scope of administrative measures is limited in most countries to the area of environmental protection, social protection of the population.
Economic Methods suggest an impact on the nature of market relations and the expansion of the market field within the framework of national education. This is the impact on aggregate demand, aggregate supply, the degree of concentration of capital, the structuring of the economy and social conditions, the use of economic growth factors.
For this purpose, the following are used:
budgetary fiscal policy;
money-credit policy;
programming;
forecasting and planning.
Financial policy involves the use of the fiscal and fiscal mechanism to achieve national economic and social goals.
Monetary policy involves the use of the method of indirect influence of the center of the bank on the elements of the market mechanism and, above all, the optimality of monetary circulation.
The highest form of state regulation is programming, forecasting and planning. Their use is associated with the complication of economic relations and the need to use integrated methods to achieve short-, medium- and long-term goals. The objects of such targeted programs are industries, regions, social conditions. Programs are: ordinary, targeted, emergency.
The most common are nationwide programs for economic recovery, structural adjustment, privatization, after the crisis stabilization of the economy.
44 . The concept of uncertainty and risk
Any management activity, to one degree or another, has a risky character, which is due to both the multifactorial dynamics of the control object and its external environment, and the role of the human factor in the process of influence. The concept of "risk" also has a multifactorial nature, which can only be revealed in conjunction with such concepts as "uncertainty", "probability", "uncertainty conditions", "risk conditions"
According to mathematical definitions, uncertainty appears when the result of an action is a set of possible alternatives, the probability of which is unknown. Risk occurs if an action leads to a set of alternatives, and the probability of each of them being known. It follows that risk is an uncertainty that can be quantified. The concepts of "risk" and uncertainty, widely used in game theory and dynamic programming, are also used in economics, politics, control and management theory, in the field of law and insurance.
The formation of market relations in Russia has intensified the process of studying entrepreneurial risk, including investment, insurance and banking, which is reflected in a number of works. At the same time, the problem of risks remains little studied, there are no sufficiently clear concepts about the essence of entrepreneurial risk, its varieties, areas of use, risk management tools.
Risks and uncertainty are integral features economic activity and management processes. Uncertainty is considered as a condition of a situation in which it is impossible to estimate the probability of a potential outcome. Often this situation occurs when the factors influencing the situation are new and it is impossible to obtain reliable information about them. Therefore, the consequences of making a managerial decision are difficult to foresee, for example, in rapidly changing conditions. These include such as science-intensive and innovation spheres, price and market conjecture. Usually a manager, faced with uncertainty, tries to obtain additional information and expert methods, and more often intuitively determine the probability of achieving a result.
The concept of “certainty” is associated with the conditions for the development and adoption of managerial decisions, when the manager knows with sufficient certainty for a given situation the potential result of each of the possible scenarios9, p. 12-13. For example, if you know the dynamics of changes in the cost of material and labor, rent, you can calculate the cost of manufacturing a particular product and predict prices. It should be noted that the situation of complete certainty is quite rare.
The concept of "risk" in the economic sense implies losses, damage, the probability of which is associated with the presence of uncertainty (lack of information, inaccuracy), as well as benefits and profits, which can only be obtained through actions burdened with risk, which is most often associated with innovative activity.
In management, the concept of "risk" is primarily associated with the nature and complexity of problems, the conditions for making managerial decisions and predicting the result. Management risk should be considered as a characteristic of management activities carried out in a situation of varying degrees of uncertainty, due to insufficient information, when a manager chooses an alternative solution, the efficiency criterion of which is associated with the likelihood of negative implementation conditions.
The risk manifests itself in the process of selling products of the production and economic system or services and is one of the end results activities. Essence, content, nature of the manifestation of the risk of the organization's activities make it possible to determine the nature of the risk as economic.
The following risk characteristics are used in management practice:
1. the amount of probable damage (losses) or the amount of expected additional income (profit) as a result of activities in a risk situation;
2. risk probability - the degree of impact of the risk source (event), measured within values from 0 to 1. In other words, each type of risk has lower and upper (from 0 to 1) probability limits;
3. risk level - the ratio of the amount of damage (losses) to the costs of preparing and implementing a risk solution. It varies in value from zero to 1, above which the risk is not justified;
4. degree of risk - a qualitative characteristic of the magnitude of the risk and its probability. There are degrees: high, medium, low and zero;
5. risk acceptability - the probability of losses and the probability that these losses will not exceed a certain level (line);
6. legitimacy of the risk - the probability of risk is within the normative level (standard) for this field of activity, which cannot be attributed without legal violations.
In crisis conditions, the enterprise has a high probability of becoming bankrupt, in connection with which the staff needs the ability in risk situations, on the one hand, to avoid unjustified losses, on the other hand, to act boldly and proactively. The manager must be able to take risks, that is, in a balanced way, without exaggerating the danger, to achieve the intended goals, of course, while observing the limits of the legitimacy of the risk13, p. 73-83.
Starting to analyze the risk situation and develop solutions, first of all, it is necessary to establish what types of risks the manager will encounter in the management process. To a large extent, this problem is solved on the basis of methodological systematization of risks and their classification, which reflects the multifactorial nature of the risk.
Of the external factors, it should be noted the sources of risk caused by the crisis of social economic development countries and individual regions, as well as market sources due to a violation of reliability or difficulties in forming new relationships with consumers, suppliers, with problems of financial, labor, material and other types of resources.
The functional features of risky activities - production, financial, marketing, etc. - serve as internal signs of risk identification. An important sign of risk identification is the content of risks: economic, social, organizational, legal, innovative, etc. Among the consequences of implementing the results of risk decisions, the most environmental, social, political risks.
Let us give some examples of managerial risk.
The marketing risk of a company's competitive development strategy can be expressed in the loss of market share, in a decrease in sales and profits, as well as in the likelihood of negative changes in the external environment, for example, rising energy prices, higher interest rates on loans.
Financial risk - risk financial strategy firms can be expressed in terms of the loss of return on securities due to the financial crisis and the fall in the exchange rate, and in the likelihood of such a situation. It should be noted that financial risks are the most mobile and diverse. Among them are the risks: interest rate, credit, currency, insolvency, liquidity, market, inflation, financial abuse.
Production risk - the excess of the current costs of the enterprise in comparison with the business plan due to unforeseen situations: equipment downtime, short supply of materials. The likelihood of such situations occurring is directly related to the decrease in the level of management organization at the enterprise due to external and internal factors.
Investment risk - the risk of uncertainty in the return of invested funds and income. For example, the risk of investing in a project is associated with the uncertainty of its implementation, due to the incompleteness and error of the initial data on the conditions of implementation, on the amount of costs and results, with the occurrence of negative situations during design ( changes in market conditions), as well as with the influence of factors of a technical, commercial, political nature.
45 . Ways to reduce risk in the face of uncertainty
Uncertainty is a situation that cannot be assessed, complicating the choice of options, the behavior of participants in economic activities. If the probability of an expected event is unknown, it can develop and occur in various ways, i.e. there is uncertainty. Often the final result is generally known, but the timing, deviations from the predicted option, and unforeseen consequences are unknown.
Under conditions of uncertainty, business decision-making is subject to risk. Risk is an estimate of the likelihood of an expected event. It cannot be absolutely accurate. Economic activity is associated with the risk of deviations from the assessments and calculations made, with the risk of failures, losses, and unexpected changes in the market situation. Starting your own business, participating in an investment project, acquiring a block of shares - all these actions are associated with risk. It is diverse, so often, when talking about risk, they mean different types of it or risk in different areas.
Risk in conditions of uncertainty is inevitable, it implies both the probability of an event and the degree of deviation from the expected result. Let's say the owner of the stock has a one in ten chance of winning from an appreciation. The amount of gain or loss with the same odds ratio can be very different - it depends on price fluctuations and the number of shares purchased.
The attitude towards risk is different. People tend to keep uncertainty to a minimum. Everyone who engages in entrepreneurial activity takes on a certain amount of risk. At the same time, he seeks to reduce the degree of risk, more accurately predict the situation, and insure against possible losses.
So, the risk is associated with an element of uncertainty, which in one way or another affects the behavior of economic agents and the results of economic (economic) activities. Of particular importance is the problem of risk in such areas as investment, insurance, credit.
There are various ways to reduce risk in the face of uncertainty. The principle of diversification is widely used - versatile and diverse placement of funds. For example, securities of many companies engaged in various fields are purchased; An investor invests in various assets with different returns and risks. One way to reduce risk is insurance. There is a developed system of banking operations insurance: transfer of property by the debtor as collateral; guarantee of another person; development technical means granting a loan.
Learning and decision-making in a market economy is based on choice. Detailed information and a variety of assets provide a breadth of choice. However, these are only prerequisites for its reliability and risk reduction. There are no universal rules for making optimal decisions.
46 . The essence of investment. Sources of financing investment activities
In the modern world of diverse and complex economic processes, an acute problem is the effective investment of capital in order to increase it, or investment.
According to the legislation of the Russian Federation, investment activity is the investment and implementation of practical actions in order to make a profit and (or) achieve another beneficial effect. The federal law "On investment activity in the Russian Federation, carried out in the form of capital investments" gives the following definition of investment:
"Investments - cash, securities, other property, including property rights, other rights having a monetary value, invested in objects of entrepreneurial and (or) other activities in order to make a profit and (or) achieve another beneficial effect."
Investment in the most general sense is understood as a temporary refusal of an economic entity from the consumption of resources (capital) at its disposal and the use of these resources to increase its welfare in the future.
If the volume of investments is significant for a given economic entity in terms of its impact on its current and prospective financial condition, the adoption of appropriate management decisions should be preceded by the planning or design stage, that is, the stage of pre-investment studies, culminating in the development of an investment project.
The investment activity of an enterprise can be financed from various sources. The diversity of the latter is explained both by the lack of the enterprise's own resources and by the difference in interests pursued by the subjects of investment activity. Sources of investment in the enterprise are divided into own and borrowed.
To own sources of investment accepted to refer to:
own financial resources formed as a result of depreciation on the existing fixed capital, deductions from profits for investment needs, amounts paid by insurance companies and institutions in the form of compensation for damage from natural and other disasters;
other types of assets (fixed assets, land plots, industrial property in the form of patents, software products, trademarks);
funds raised as a result of the issue and sale of shares by the enterprise;
funds allocated by superior holding and joint-stock companies, industrial and financial groups on an irrevocable basis;
charitable and other similar contributions.
To borrowed sources of investment usually include: investment allocations from the state budgets of the Russian Federation, republics and other constituent entities of the Russian Federation, local budgets and relevant extra-budgetary funds, which are allocated mainly to finance federal, regional or sectoral targeted programs (gratuitous funding from these sources actually turns them into a source of own funds); foreign investments provided in the form of financial or other material and non-material participation in the authorized capital of joint ventures, as well as in the form of direct investments (in cash) of international organizations and financial institutions, states, enterprises (organizations) of various forms of ownership and individuals (attracting foreign investment ensures the development of international economic relations); various forms of borrowings, including loans provided by the state and entrepreneurship support funds on a repayable basis, loans from banks and other institutional investors, enterprises, promissory notes and other funds.
Depending on what sources of financing the company attracts to finance its investment activities, the following are distinguished: main forms of investment financing:
self-financing - financing of investment activities entirely at the expense of own financial resources, formed from internal sources; usually used in the implementation of short-term investment projects with a low rate of return;
credit financing is used, as a rule, in the process of implementing short-term investment projects with a high rate of return on investment;
equity financing - a combination of several sources of financing; the most common form of financing investment activities, which can be used in the implementation of various investment projects.
47 . Macroeconomic Models
One of the main methods of macroeconomics is modeling based on abstraction, i.e. this is the construction of an economic model or a simplified reflection of reality, described in a formalized way.
Macroeconomic models have 2 types of variables - exogenous (political) and endogenous.
Macroeconomic indicators can be absolute or relative
Absolute - in monetary, value terms (GDP, total output, national income, etc.) or in the number of people (number of unemployed, disabled, etc.)
Relative - in percentages or fractions of units (inflation rates, etc.)
48 . Macroeconomic agents
Macroeconomic agents - the total economic agents involved in the economic activity of the country - the household, enterprises, the state and the foreign sector.
The household and firms form the private sector of the economy.
The private and public sectors give a closed economy, the addition of a foreign sector gives an open economy.
The foreign sector unites all countries of the world, the cooperation of these countries through world trade (export or import of goods and services and financial assets)
A specific method of macroeconomics - aggregation - allows to single out aggregate macroeconomic agents.
49 . Subject of macroeconomics
Macroeconomics is a special branch of economic theory, which is a continuation of microeconomics and studies the functioning of the economy as a whole. The goals of macroeconomics in most countries are: maintaining full employment of resources, price stability, sustainable economic growth and minimizing inflation.
Macroeconomic analysis involves abstracting from the differences between individual markets and industries, clarifying the mechanism of the functioning of the economic system as a whole by maintaining macroeconomic equilibrium. This is the difference between macroeconomics and microeconomics. However, macro- and microeconomic processes are closely interrelated. Macroeconomic decisions affect the economic development of firms through savings, consumer spending, investment, etc.
Macroeconomic analysis is based on the simplest model of the circulation of products and income, the main links of which are firms and households.
Subject macroeconomic theory is the behavior of the economy, the system of its internal relations, considered as a whole. Macroeconomic theory studies:
Economic behavior, economic ups and downs, inflation and unemployment rates;
Economic policy (changing exchange rates and investments); - economic factors (affecting the interest rate, prices and budget). Macroeconomics is the basis of the economic policy of the state. National economy
- economic activity of economic entities on a national scale, aimed at meeting the needs of the nation.
Macroeconomics uses both general scientific and specific research methods
The main specific method used in macroeconomics is macroeconomic aggregation, which is understood as the unification of phenomena and processes into a single whole. The aggregation of the value characterizes the market situation and its change (market interest rate, GDP/GNP, general price level, inflation rate, unemployment rate, etc.).
Macroeconomic aggregation extends to economic entities (households; firms (business sector); state; foreign sector (abroad) and markets (goods and services, securities, money, labor, real capital, international currency)).
Macroeconomics makes extensive use of economic models- formalized descriptions of various economic phenomena and processes. Macroeconomic models allow you to abstract from minor elements and focus on the main elements of the system and their relationships. Since models are an abstract reflection of reality, they cannot be all-encompassing.
50 .macroeconomic equilibrium. The concept of macroeconomic equilibrium
Macroeconomic equilibrium is such a state of the national economy when the use of limited production resources to create goods and services and their distribution among different members of society are balanced, i.e. there is an overall proportionality between:
Resources and their use;
Factors of production and the results of their use;
Aggregate production and aggregate consumption;
Aggregate supply and aggregate demand;
Intangible and financial flows.
Consequently, macroeconomic equilibrium presupposes the stable use of their interests in all spheres of the national economy.
Such a balance is an economic ideal: without bankruptcies and natural disasters, without social and economic upheavals. In economic theory, the macroeconomic ideal is the construction of models of the general equilibrium of the economic system. In real life, various violations of the requirements of such a model occur. But the significance of theoretical models of macroeconomic equilibrium makes it possible to determine the specific factors of deviations of real processes from ideal ones, to find ways to implement the optimal state of the economy.
51. Main macroeconomic indicators
The main macroeconomic indicators are:
Gross national product
Gross domestic product
net national product
Gross National Income
Gross national disposable income
final consumption
Gross capital formation
Net lending and net borrowing
Balance foreign trade
Gross domestic product
The main indicator of the system of macroeconomic indicators is the Gross Domestic Product, which characterizes the value of final goods and services produced by the country's residents over a certain period of time, minus the value of intermediate consumption. Gross domestic product is calculated at end-use market prices, that is, at prices paid by the buyer, including all trade and transport margins and taxes on products.
Gross National Income
GNI is the sum of primary incomes received by residents of a given country for a given period in connection with their direct or indirect participation in the production of the GDP of their country and the GDP of other countries. Thus, GNI is greater than GDP by the amount of primary income received by residents of a given country from abroad (minus primary income paid to non-residents).
Primary income includes wages, profits, taxes on production, income from property (interest, dividends, rent, etc.).
Gross national disposable income
GNI differs from GNI in the balance of current redistributive payments (current transfers) transferred abroad or received from abroad. These transfers may include humanitarian aid, gifts from relatives received from abroad, and fines and penalties paid by residents abroad. Thus, the GNDI covers all income received by residents of a given country as a result of the primary and secondary distribution of income. It can be determined by summing the gross disposable income of all sectors of the economy. GNI is divided into final consumption expenditure and national saving.
final consumption
The CP includes final consumption expenditures of households, government, non-profit organizations serving households. At the same time, the costs of the state administration and non-profit organizations serving households coincide with the cost of non-market services provided by these organizations.
Gross capital formation
Gross capital formation covers the accumulation of fixed capital, the change in inventories, as well as the net acquisition of valuables (jewelry, antiques, etc.), i.e., these are investments by resident units of funds in fixed capital objects to create new income in the future through using them in production. The IR of fixed capital includes the following components: acquisition, net of disposal, of new and existing fixed assets; the cost of improving non-produced tangible assets; costs associated with the transfer of ownership of non-produced assets.
Gross capital formation as an element of GDP includes gross fixed capital formation, growth of material circulating assets, expenses for the acquisition of valuables. Accumulation can be calculated on a net basis, that is, minus the consumption of fixed capital (depreciation).
Foreign trade balance
The foreign trade balance is an important element of the final use of GDP and is defined as the difference between exports and imports. If the balance of foreign trade is positive, then there is net export.
52 . Nominal and real GDP
Nominal GDP is the GDP calculated at current prices, at the prices of the given year. Two factors influence the value of nominal GDP:
change in real output
change in the price level.
In order to measure real GDP, it is necessary to "clear" nominal GNP from the effect of changes in the price level.
Real GDP is GDP measured in comparable (constant) prices, in base year prices. At the same time, any year can be chosen as the base year, chronologically both earlier and later than the current one. The latter is used for historical comparisons (for example, to calculate 1980 real GDP at 1999 prices. In this case, 1999 would be the base year and 1980 the current year).
Real GDP = Nominal GDP / General price level
The general price level is calculated using a price index.
If the percentage changes in nominal GDP, real GDP and the general price level (and this is the inflation rate) are known, then the relationship between these indicators is as follows:
change in real GDP (in %) = change in nominal GDP (in %) - change in the general price level (in %)
Gross domestic product deflator (GDP deflator)- a price index created to measure the general level of prices for goods and services (consumer basket) for a certain period in the economy. It is calculated as the Paasche index and expressed as a percentage.
Basic properties
When calculating the price deflator, all goods and services included in the GDP of a given country are taken into account.
This index does not include imported goods.
Based on the consumer basket of the current year, not the base year as in the consumer price index
Clearly underestimates the level of inflation in the economy
Includes prices for new products and services.
53. Macroeconomic instability
Macroeconomic instability - violations of the macroeconomic balance, manifested: - in unemployment; - in inflation; - in the cyclical nature of economic development; - in stable balance of payments deficits.
54. Essence, stages of economic cycles
The economic cycle is the successive ups and downs of the fall in the level of business activity in society.
By duration:
according to Kondratiev 40-60 years
by Jukler 7-12 years
according to Kuznetsov 15-25 years
according to Marx 25 - 30 years
according to Forester 200 years
according to Hoffler 1000 years
Each cycle includes four phase
First - lifting phase, character. high investment activity, high incomes of society, constantly growing aggregate demand and the price level does not change significantly
Second - economic peak. Aggregate incomes are growing, aggregate demand is growing, but here producers start to face the problem of lack of resources, which leads to a decrease in supply, shortages, rising prices, inflation, and so on. The society is already beginning to face shortages of final goods and services.
Third - decline phase. Reduction in demand for investment goods, underloading and unemployment in these industries, part of the workers is unemployed and ceases to receive income => total income is reduced by this amount => and aggregate demand for the remaining goods and services, which leads to underloading and unemployment in all sectors
Fourth - stagnation phase low point of decline. Low investment activity, downtime of enterprises, massive unemployment, high inflation, etc.
55 . Inflation
Inflation and its indicators
Inflation ("inflation" - from the Italian word "inflatio", which means "swelling") is a steady upward trend in the general price level.
The opposite of inflation is deflation, a steady downward trend in the general price level. There is also the concept of disinflation (desinflation), which means a decrease in the rate of inflation.
The main indicator of inflation is the rate (or level) of inflation (rateofinflation), which is calculated as a percentage of the difference in price levels of the current and previous year to the price level of the previous year
An increase in the price level reduces the purchasing power of money. The purchasing power (value) of money is understood as the amount of goods and services that can be bought with one monetary unit. If the prices of goods rise, then the same amount of money can buy fewer goods than before, so the value of money falls.
Types of inflation
Depending on the criteria, different types of inflation are distinguished. If the criterion is the rate (level) of inflation, then allocate: moderate inflation, galloping inflation, high inflation and hyperinflation.
Moderate inflation is measured in percentages per year, and its level is 3-5% (up to 10%). This kind of inflation is considered normal for a modern economy and is even considered an incentive to increase output.
galloping inflation is also measured in percentages per year, but its rate is expressed in double digits and is considered a serious economic problem for developed countries.
High inflation measured in percentages per month and can be 200-300% or more per year (note that the calculation of inflation for the year uses the "compound interest" formula), which is observed in many developing countries and countries with economies in transition.
Hyperinflation, measured by percentages per week and even per day, the level of which is 40-50% per month or more than 1000% per year. Classical examples of hyperinflation are the situation in Germany in January 1922-December 1924, when the growth rate of the price level was 1012 and in Hungary (August 1945-July 1946), where the price level increased 3.8 * 1027 times over the year with an average monthly growth of 198 times.
If the criterion is the form of manifestation of inflation, then there are: explicit (open) inflation and suppressed (hidden) inflation.
open(explicit) inflation manifests itself in the observed increase in the general price level.
repressed(hidden) inflation occurs when prices are set by the state, and at a level lower than the equilibrium market price (set by the ratio of supply and demand for commodity market) (Fig. 1.). The main form of manifestation of latent inflation is the shortage of goods.
Price index
Inflation is measured using a price index. There are various methods for calculating this index: consumer price index, producer price index, GDP deflator index. These indices differ in the composition of goods included in the estimated set, or basket. In order to calculate the price index, it is necessary to know the value of the market basket in a given (current) year and its value in the base year (the year taken as a reference point). The general price index formula is as follows:
Let us assume that 1991 is taken as the base year. In this case, we need to calculate the cost of the market set in current prices, i.e. in the prices of the given year (the numerator of the formula) and the value of the market set in basic prices, i.e. in 1991 prices (denominator of the formula).
Since the rate (or rate) of inflation shows how much prices have increased in a year, it can be calculated as follows:
PI 0 - price index of the previous year (for example, 1999),
IC 1 - price index of the current year (for example, 2000).
In economics, the concept of nominal and real income is widely used. Under nominal income understand the actual income received by an economic agent in the form of wages, profits, interest, rent, etc. Real income is determined by the amount of goods and services that can be purchased for the amount of nominal income. Thus, to obtain the value of real income, it is necessary to divide the nominal income by the price index:
Real income = Nominal income / Price index
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